Home > Jan 2018 > Jan 2, 2018 China PMI’s beat estimates but Copper is down and PBoC is in 7th day of Not adding Liquidity

Jan 2, 2018 China PMI’s beat estimates but Copper is down and PBoC is in 7th day of Not adding Liquidity

January 2nd, 2018

Markit PMI (Caixin) and Official PMI data post for December and both beat estimates. What was the best part was the last part of the comment, ” However, we should not underestimate downward pressure on growth next year due to tightening monetary policy and strengthening oversight on local government financing.”With that, Chinese Equities pushed up except for the Casino Stocks that have gaming revenue down AND Shanghai Futures had Copper down on the news. Oil has been pushing up over Iran Troubles, Oil futures are up only .18% though. Futures are slightly up .06% in the first hour of the Europe session. PBoC for the seventh day suspended Open Market Operations citing that Liquidity was OK. Bitcoin is hanging out at 13,483, while Ethereum is pushing up.

Jan 2018

  • Trading_Nymph

    From Xinhua….BEIJING, Jan. 2 (Xinhua) — China’s central bank suspended open market operations for the seventh working day Tuesday, citing sufficient liquidity in the banking system.

    Liquidity was at a “relatively high level,” which can offset the effect of matured reverse repos, the People’s Bank of China (PBOC) said in a statement.

    A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

    The PBOC said earlier that it would conduct open market operations in a flexible way to meet liquidity needs of banks.

    China will continue a prudent and neutral monetary policy in 2018 as the world’s second-largest economy strives to balance growth with risk prevention.

    “Prudent monetary policy should be kept neutral, the floodgates of monetary supply should be controlled, and credit and social financing should see reasonable growth,” said a statement released after the Central Economic Work Conference.

  • Trading_Nymph

    From Markit PMI China…Caixin China General Manufacturing PMI™
    Operating conditions improve at quickest pace for four months
    The headline PMI pointed to a stronger improvement in Chinese manufacturing operating
    conditions at the end of 2017. Latest data highlighted faster growth of output, total new work
    and export sales. Greater production led to a further rise in buying activity, with the rate of
    growth quickening to a four-month high. At the same time, capacity pressures continued to
    build, with backlogs rising amid a further decline in workforce numbers (albeit marginal).
    Inflationary pressures remained elevated, with input costs rising sharply and prices charged
    increasing at a solid pace.
    Optimism towards the business outlook picked up slightly from November’s joint-record low, but remained weak in the context of historical
    The seasonally adjusted Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of
    operating conditions in the manufacturing economy – posted 51.5 in December, up from 50.8 in November, to signal a further improvement
    in the health of the sector. Though modest, the rate of strengthening was the highest seen for four months.
    Manufacturing production continued to increase across China at the end of 2017. Notably, the rate of expansion quickened to a three-month
    record. Improved sales and stronger underlying market demand were cited as key sources of growth in December. Furthermore, total new
    orders expanded at the steepest pace since August, with export sales also rising at a faster pace at the end of the year.
    Despite stronger increases in output and new work, manufacturers continued to shed staff in December. That said, the rate of job losses was
    the weakest seen for nine months and marginal. Nonetheless, lower staff numbers contributed to another rise in outstanding business, with
    the rate of accumulation quickening slightly since November.
    Higher production prompted firms to raise their buying activity for the seventh month running. Moreover, the rate of growth was the fastest
    seen since August. However, stock shortages at suppliers and delays linked to environmental inspections led to a further lengthening of
    average delivery times.
    Firms commented on using existing inventories of finished items to satisfy new orders, which led to a slight reduction in inventories of
    finished goods. Stocks of purchases also fell in December, albeit marginally.
    Average input costs continued to rise sharply, despite the rate of inflation softening to a four-month low. Anecdotal evidence indicated that
    higher costs for a variety of raw materials drove up cost burdens. Consequently, firms increased their selling prices solidly.
    Sentiment towards the 12-month business outlook picked up slightly from November’s joint-record low, but remained well below the historical
    series average. According to panellists, forecasts of relatively subdued client demand and changes to national policies had dampened
    confidence at the end of 2017.
    Key Points
     Stronger increases in output and new orders
     Employment declines only slightly
     Confidence towards the year-ahead remains historically
    Commenting on the China General Manufacturing PMI™ data,
    Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at
    CEBM Group said:
    “The Caixin China General Manufacturing Purchasing Managers’
    Index rose to 51.5 in December, the highest since August. Stronger
    increases in both output and new orders were seen in December
    compared to the previous month. Growth in input prices eased to a
    four-month low, while growth in output prices slowed marginally.
    Stocks of finished goods shrank again in December, and stocks of
    purchases declined slightly.
    “Manufacturing operating conditions improved in December,
    reinforcing the notion that economic growth has stabilized in 2017
    and has even performed better than expected. However, we should
    not underestimate downward pressure on growth next year due to
    tightening monetary policy and strengthening oversight on local
    government financing.”

  • Trading_Nymph

    The Official PMI….China Dec official factory PMI dips to 51.6, hits forecasts
    Reuters Staff

    2 MIN READ

    BEIJING, Dec 31 (Reuters) – Growth in China’s manufacturing sector slowed slightly in December as a crackdown on air pollution and a cooling property market weigh on the world’s second-largest economy.

    The official Purchasing Managers’ Index (PMI) released on Sunday dipped to 51.6 in December, compared with 51.8 in November. But it remained comfortably above the 50-point mark that separates growth from contraction on a monthly basis.

    Analysts surveyed by Reuters had forecast the reading would ease to 51.6 after unexpectedly picking up last month.

    Boosted by government infrastructure spending, a resilient property market and unexpected strength in exports, China’s manufacturing and industrial firms helped the economy post better-than-expected growth of 6.9 percent through the first nine months of this year.

    But November economic data disappointed analysts, with industrial output, investment and the property market all backing expectations that growth momentum is starting to moderate.

  • Trading_Nymph

    From Bloomberg…Macau Casino Stocks Tumble as Gamblers Get Lucky at the Tables
    By Daniela Wei
    January 1, 2018, 7:55 PM PST
    December gaming revenue missed analyst estimate of 20% gain
    Wynn Macau led casino stocks tumble as players luck prevailed

    When high rollers are the biggest drivers of Macau’s casino revenue, it’s much harder for analysts to predict betting results.

    The hub’s casino stocks tumbled Monday, with Wynn Macau Ltd. leading losses after gaming revenue rose almost 15 percent in December to 22.7 billion patacas ($2.8 billion) — missing the median estimate of a 20 percent increase in a Bloomberg survey.

    Analysts attributed the unexpected slower growth to bad luck for casinos as gamblers took home greater-than-expected winnings. Many of those winning gamblers were high rollers. High stakes players will continue to dominate in 2018, and these smaller groups of elite players are expected to bring gaming revenue turbulence with them.

  • panther341

    dollar near 2017 lows which were hit earlier in the year – not all that recently. gold no longer threatened by bitcoin and is nicely over $1300